Around the nation: Chrysler to stop leasing operations

Copyright 2008 Houston Chronicle News Services

Published
5:30 am CDT, Saturday, July 26, 2008

AUTOS

Chrysler to stop leasing operations

DETROIT — Chrysler said Friday its financial arm will get out of the auto-leasing business by the end of the month because economic conditions have made leasing more expensive than buying for both consumers and the company.

The move comes as Chrysler Financial is in the process of renewing a $30 billion credit line with banks.

Chrysler Vice Chairman and President Jim Press said the company wants to allocate its limited resources to retail incentives and financing, which make up 80 percent of the market, instead of leasing, which is 20 percent of the U.S. market.

ECONOMY

Friday's gains cap Wall Street's week

Wall Street ended a volatile week with uneven gains Friday after better-than-expected economic data placated a market pummeled a day earlier by concerns about housing and the financial sector.

The Commerce Department reported that orders sent to factories for big-ticket manufactured goods such as cars, appliances and machinery rose by 0.8 percent in June, the strongest gain in four months and well ahead of Wall Street's expectations. Another Commerce Department report showed that new-home sales dropped by a smaller-than-expected 0.6 percent.

REGULATION

FDIC takes over 28 of bank's branches

CARSON CITY, NEV. — Twenty-eight branches of 1st National Bank of Nevada and

First Heritage Bank
, operating in Nevada, Arizona and California, were closed Friday by federal regulators.

The banks, owned by Scottsdale, Ariz.-based First National Bank Holding Co., were scheduled to reopen on Monday as Mutual of Omaha Bank branches.

The FDIC said the takeover of the failed banks was the least costly resolution and all depositors — including those with funds in excess of FDIC insurance limits — will switch to Mutual of Omaha with "the full amount of their deposits."

The FDIC also said account holders can access funds by writing checks or using ATM or debit cards.

RETAILERS

Starbucks to limit sandwiches' smells

Starbucks Corp. will keep selling warm breakfast sandwiches at its stores after altering the recipes to minimize the smell.

Starbucks founder and Chief Executive Officer Howard Schultz earlier said the chain would discontinue breakfast sandwiches by Sept. 30 because their smell overwhelmed the aroma of coffee in the cafes.

"We are not reversing our decision to replace the breakfast sandwiches, but rather we are continuing to evolve our food offerings," Starbucks said in an e-mail.

IN OTHER NEWS ...

• Freddie Mac reported that rates on 30-year mortgages surged to 6.63 percent this week, up sharply from 6.26 percent last week. Rates on 15-year, fixed-rate mortgages rose to 6.18 percent, up from 5.78 percent. Rates on five-year adjustable-rate mortgages rose to 6.16 percent, up from 5.80 percent, while rates on one-year ARMs jumped to 5.49 percent, compared with 5.10 percent last week.

• The seven-day average yield on money market mutual funds in the week ended Tuesday was 1.84 percent, unchanged from the previous week, Money Fund Report said. The 30-day average yield fell to 1.86 percent from 1.87 percent. The seven-day compounded yield was unchanged at 1.86 percent, and the 30-day compounded yield was unchanged at 1.88 percent, Money Fund Report said. The average maturity of the portfolios held by money funds was unchanged at 45 days.